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Issues: (i) Whether leave granted under clause 12 of the Letters Patent could be revoked on the basis that no part of the cause of action arose within the Calcutta High Court's original jurisdiction; (ii) Whether the question of validity of presentation of documents under the letter of credit and the role of the advising bank could be decided on an application for revocation of leave; (iii) Whether the balance of convenience justified refusal of jurisdiction.
Issue (i): Whether leave granted under clause 12 of the Letters Patent could be revoked on the basis that no part of the cause of action arose within the Calcutta High Court's original jurisdiction.
Analysis: For deciding revocation of leave on a point of demurrer, the averments in the plaint had to be assumed to be true. The plaint specifically pleaded jurisdictional facts, namely that the letter of credit was intimated through UCO Bank within jurisdiction, that documents were presented there, and that payment was to be received there. The Division Bench could not reject those pleaded assertions by reaching a contrary factual conclusion at that stage.
Conclusion: The revocation of leave was not justified and the jurisdictional objection could not succeed at that stage.
Issue (ii): Whether the question of validity of presentation of documents under the letter of credit and the role of the advising bank could be decided on an application for revocation of leave.
Analysis: The role of UCO Bank and the validity of presentation raised a mixed question of law and fact. Whether the bank was authorised to receive the documents, and whether payment was to be made at Calcutta or Dusseldorf, depended on evidence and on the factual position of the bank's role. Such matters could not be conclusively determined merely for revoking leave under clause 12.
Conclusion: These issues had to be decided at trial and could not support revocation of leave.
Issue (iii): Whether the balance of convenience justified refusal of jurisdiction.
Analysis: The learned Single Judge had found that the respondent would not suffer inconvenience in defending the suit from its Calcutta office, whereas the appellants would incur substantial foreign exchange expense if compelled to litigate in Germany. That assessment was not disturbed by the Division Bench, and no reason was found to interfere with it.
Conclusion: The balance of convenience did not warrant interfering with the choice of forum in favour of the respondent.
Final Conclusion: The order revoking leave was unsustainable, and the suit was entitled to proceed in the Calcutta High Court; the appeal succeeded with costs.
Ratio Decidendi: On an application to revoke leave under clause 12 of the Letters Patent, the Court must proceed on the basis of the plaint allegations, and unless the clearest case is made out, disputed questions affecting jurisdiction or the validity of presentation under a letter of credit must be left for trial on evidence.
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